Germany’s Boycott Of Iran Causes Six-Figure Shortfall In Berlin’s Budget
Germany’s Boycott Of Iran Causes Six-Figure Shortfall In Berlin’s Budget
November 26, 2007
Vittorio Hernandez – AHN News Writer
Berlin, Germany (AHN) – Germany’s trade boycott with Iran is causing a serious setback to Berlin’s economy. According to the German Finance Ministry, the effect of the trade embargo on the 2008 budget could cost up to $1.2 billion (800 million euro).
German exports to Iran fell 18 percent for the first six months of 2007 and the decline continues to grow. Germany used to be one of Iran’s major trading partners. However, the United States has pressured the European Union to cut trade ties with Iran as Tehran continues its controversial nuclear development program.
Despite the Washington pressure, many German firms want to continue trade with Tehran. On September German traders gathered at Darmstadt to learn about market opportunities in Iran, which has expressed willingness to purchase commodities from Germany especially turbines for power plants, water treatment systems, monorails and wind farm equipment.
Even if Germany’s Economics Ministry has reduced export credit guarantees it issues for trade with Iran, around 1,700 German companies still maintain commercial ties with Tehran. These include large German firms like BASF and Siemens, which supplies locomotives and gas turbines to Iran.
Despite the reduction to $1.2 billion in export credit guarantees in 2006 from 2004’s $3.3 billion, German firms increased their exports to Tehran to $5.7 billion last year from $5 billion in 2004.
Aside from the U.S. pressure, German Chancellor Angela Merkel is not keen on trading with Iran due to Iranian President Mahmoud Ahmadinejad’s anti-Israeli stance. Merkel said in February 2006, “a president that questions Israel’s right to exist, a president that denies the Holocaust, cannot expect to receive any tolerance from Germany. We have learned out history.”
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